by Robert W. Poole, Jr.

Virginia Gov. Bob McDonnell started the New Year off with a bang by proposing to replace the state’s fuel tax with an increase in the state sales tax. McDonnell correctly points out that fuel taxes are a declining revenue source and therefore not sustainable long-term as the primary source of highway funding. Numbers released with his proposal show that it starts off revenue-neutral, but over time produces significantly more revenue—which the Governor proposes to divvy up among highways, transit, ports and aviation.